Erste Group embraces synthetic data to foster innovation

With a three-year partnership agreement with MOSTLY AI, a pioneering solution provider in the field of synthetic data, Erste Group will accelerate innovation in digital banking through the use of data that is representative but not real, thereby avoiding the risk of compromising customers’ privacy and confidentiality. 

Synthetic data generated by artificial intelligence offer banks and financial institutions a new and completely anonymized way to extract valuable information and identify patterns from the vast amount of customer data they hold.

When developing and testing new products and services, banks until now had to rely on traditional anonymization techniques to utilize their existing customer data. With traditional anonymization, banks have faced a trade-off between anonymity and the actual value of the data, as the techniques applied have removed most of the information required for advanced analytics. In addition, the importance of data protection has only increased with the introduction of stricter data protection regulation across the globe, such as the EU’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). 

“The customers of Erste Group entrust us with their most valuable assets – including the highly sensitive personal data that we manage on their behalf. In return for their loyalty and trust, we seek to offer these customers highly personalized services,” says Maurizio Poletto, Chief Platform Officer at Erste Group, and continues: “Working with synthetic data, we can develop and test our services in a much more sophisticated manner than before, while still ensuring complete privacy protection for our customers.”

Powering in-house innovation

George Labs, Erste Group’s in-house fintech lab, and MOSTLY AI have already completed a number of successful projects. By using realistic synthetic datasets, the George Labs team has been able to efficiently test the platform using real-life scenarios, resulting in faster testing and development cycles and, ultimately, an even more user-friendly and customer-centric product.

The new partnership with MOSTLY AI is part of Erste Group’s strategy to not only bring innovative technology and solutions into the Group, but also to continuously partner with the best and brightest startups and technology providers. Rather than simply sourcing new solutions, Erste Group wants to build partnerships that allow both parties to jointly develop and learn in order to prepare and build the financial services of the future that are in line with Erste Group’s mission to bring financial prosperity and health into the region. 

“We see synthetic data as the foundation for all future data-driven development, as it provides the only GDPR-compliant method for unlocking advanced analytics and insights based on customer data,” says Dietmar Böckmann, Managing Director of s IT Solutions, Erste Bank and Sparkassen’s IT solutions provider. Böckmann adds: “Erste Group has always had the ambition to be at the forefront of technology and innovation. This partnership with MOSTLY AI is a logical step on our journey towards increasing customer success and satisfaction. We are preparing the bank for a data- and purpose-driven future in which synthetic data continuously protects and serves customers.”

Shaping the future of financial services

Future plans include the development of AI models and intelligent banking functions, offering relevant customer recommendations specific to their profile and preferences based on insights from synthetic data analysis, as well as more technical use cases like improved testing options. Erste Group is set to be one of the first banks to address major issues of social and economic development in a data-driven, sustainable and customer-centric way. Synthetic data will play an important part in these projects through privacy protection and data democratization across the organization, driving innovations further and costs down.

Tobias Hann, CEO of MOSTLY AI, is proud of the new partnership and emphasizes the long-term vision: 

“Our goal here goes well beyond closing a business deal. We are at the frontier of technology and to continue this journey with the most innovative financial institution in Europe brings huge opportunities for our product development,” he said and concludes: “This multi-year partnership and the work both partners will invest in the financial synthetic data space will define the technological landscape of banking for years to come. There is no doubt that synthetic data is a key element to developing the financial services of the future, and our mission to make privacy truly respected in the data ecosystem is destined to succeed.”

Factbox: What is synthetic data?

The expression ‘synthetic data’ has previously been used to describe randomly produced ‘dummy data’. With the advancements of deep neural networks, today’s synthetic data is generated by AI and thus highly realistic. To create it, an AI digests real data and learns its features, correlations, and patterns in great detail. Based on the training data, infinite amounts of completely artificial, synthetic data can be generated from scratch, matching the statistical qualities of the originally ingested dataset. The new, synthetic datasets are highly representative, super realistic, scalable, GDPR- and CCPA-compliant, and contain all of the valuable insights without the risk of leaking any personal information.

Artificial Intelligence (AI) can be used to create highly realistic yet fictional portraits. Synthetic data is AI-generated customer data that has all the characteristics of real customers

About Erste Group

Erste Group is the leading financial services provider in the eastern part of the EU. Its ca. 46,000 employees serve over 16 million customers in nearly 2,200 branches in 7 countries (Austria, Czech Republic, Slovakia, Romania, Hungary, Croatia, Serbia). For the financial year 2020, Erste Group had EUR 277 billion in total assets, posted a net profit of EUR 783 million and had a common equity tier 1 ratio (CRR, final) of 14.2 %.

About MOSTLY AI

Headquartered in Vienna, MOSTLY AI’s growing team of international experts has developed a game-changing AI technology enabling its clients and partners to grow their businesses based on insights from the world’s most accurate synthetic data.

Synthetic data allows organizations across the world to unlock the value of the often highly sensitive customer data they hold, while at the same time keeping the privacy of their customers fully protected and in full compliance with data protection regulations.

With the ability to generate an infinite number of highly realistic and representative datasets without the risk of breaching privacy and confidentiality, MOSTLY AI’s platform allows organizations to embrace data-driven design, development and testing and as a result, be able to offer their end-users more personalised services and products.